HMRC are ramping up their enquiry activity – are you covered?

HMRC are ramping up their enquiry activity – are you covered?


Garbutt + Elliott provide a fee protection scheme called Tax Investigation Service to help our clients, which covers the professional costs incurred in assisting them with a HMRC tax investigation or enquiry.


HMRC do not need a specific reason to start an enquiry or investigation into your personal or business tax affairs, and their highly efficient ‘Connect’ software is constantly accessing and trawling through financial information, with 83% of tax investigations being triggered by the ‘Connect’ system.


Following the unprecedented Government financial support for businesses and individuals during the Covid-19 pandemic, we predicted a marked increase in HMRC enquiry activity this year – especially for any businesses that have claimed Covid-19 support such as the CJRS (furlough scheme).


Recent research by *UHY Hacker Young confirmed that HMRC opened 102,000 investigations in Q1 2021, up 36% from 75,000 in the previous quarter and almost four times the low of 27,000 in the second quarter of 2020 – increasing its tax take by 29% to £14.2bn in Q1 2021, up from £11bn in the same period in 2020. HMRC have clearly scaled up its resources and efforts and we expect this trend to continue, so having the right fee protection is as important now as ever.


Our service covers HMRC checks and formal enquiries, whether into Corporate or Personal Taxes, PAYE/VAT checks or disputes, Employment Status reviews (including the new Off Payroll Working) etc. Some of the key benefits for our business clients include:


  • Free personal tax return cover for directors/partners and their spouses, and company secretaries, where we are also engaged as personal tax agents.


  • Cover for PAYE and VAT compliance visits/checks and any resulting disputes.


  • Cover for furlough claims made under the CJRS or Self-Employed Income Support Scheme (unless part of a criminal or fraud enquiry)


Importantly, as well as covering the professional fees incurred in dealing with the enquiry, being a TIS member enables our team of award-winning tax specialists to step in and assist you. As your appointed agent, we liaise directly with HMRC on your behalf, adding our technical expertise and experience to the case, aiming to bring matters to the best possible conclusion.


There has never been a more appropriate time to consider fee protection insurance. If you would like to know more about Garbutt + Elliott’s Tax Investigation Service, and our wider services, please contact us at 


*Source: UHY Hacker Young, July 2021.